Zijin Mining to acquire Chifeng Gold's controlling power for over 18 bln yuan

Zijin Mining (2899) said on Monday that it planned to acquire the controlling power in Chifeng Gold (6693) for 18.26 billion yuan (HK$20.7 billion), becoming its single biggest shareholder.

Zijin Mining's subsidiary, Zijin Gold, will buy 242 million A shares of Chifeng Gold from its single largest shareholder, Li Jinyang, and the concert party Zhejiang Hanfeng, at 41.36 yuan per share, which represents a premium of 1.3 percent to the closing price before its suspension of trading last Thursday, totaling 10 billion yuan.

Meanwhile, Zijin Gold proposed to subscribe to 311 million H shares of Chifeng Gold to be issued under a specific mandate at a consideration of HK$30.19 per share - about 83 percent of the average price of Chifeng Gold's H Shares over the sixty full trading days before the suspension of trading, with the amount of HK$9.39 billion.

Upon completion of the transactions, the company will hold 572 million shares of Chifeng Gold, representing 25.85 percent of its total shares, which indicates that it will obtain controlling power in Chifeng Gold and that its financial statements will be consolidated.

Zijin Mining said the deals can help significantly enhance the company’s resource reserves and add a premium domestic listed gold platform to the company, as well as comprehensively strengthen its gold resource integration capabilities.